THE TRADERS CLUB WEEKLY COMMODITIES REPORT:

08/12/17

CONTENTS:

Week in the markets P.3

Commodities to Watch P.4

COT & Seasonality Hot List P.5

Seasonality Rolling next Quarter P.6

Commodities Chart of the Week P.7

Goldman Sachs Commodity Index (GSCI) Watch P.8

Metals & Energy P.9

Copper Watch P.10

Gold Watch P.11

Crude WTI Watch P.12

Commodities

Week in the markets:

Commodities:

• To note this week, and is rarely seen is that, in the short term every commodity on the watch list has been bearish and momentum across the board is also bearish! What does this mean? My guess is it’s the big boys (large speculators) cleaning up their positions for the year end plus quieter demand currently from China?

• Metals look particularly depressed in both the Base and PGM camps.

• WTI reversing from highs to support at $55 – can it build a base for a turn higher into 2018?

• Seasonality plays: Corn, Cotton, FCOJ?

Commodities To Watch:

The below trend direction analysis is based on an assessment of the daily technicals. Use more detailed technical analysis e.g. indicators, support and resistance, sentiment: COT, Open Interest etc. for possible trade entry, exits and stops.

Bullish Opportunities: Not behaving as it should: Bearish Opportunities:

Cotton No2. Seasonal play but price coming off from recent highs.

Corn: seasonally bullish play in Dec and into the New Year.

FCOJ potential seasonality play this time of year.

COT And Seasonality Hot list:

How to use:

The COT Index Assessment is based on a weekly index calculation and net positions of the ‘large speculators’ category of the CFTC report.Seasonality: historical price data has been analysed over a 20 year period to draw conclusion as to the seasonal direction of price –See following page for strength coding and relevance of numbers in boxes..Technicals: An assessment is made on the current longer term price trend and the current price momentum leading to (and including COT data and seasonality) an overall assessment for the possible price direction of the asset.

Seasonality Rolling next Quarter :

How to use:

Seasonality strength based on 20 yrs of data, scaled by week into strength / weakness buckets. Numbers inside a box are only presented if there is high probability of the event occurring. This is their historical % likelihood of the event occurring. This page reports the next three months seasonality results, and presents next weeks current ‘hot/cold’ seasonality commodities.

Commodities chart of the week (Non Metals/ Energy): CornCorn: Usually a strong bullish play through December into the New Year (See Seasonality chart below). This progress could be hindered by over supply concerns. Keep an eye on the COT for demand movement. Downside support 340 and upsides 362 then 393? (Corn Mar’18 futures (Corn H_8) can be found on FxPro)

Goldman Sachs Commodity Index (GSCI) Watch :

How to use: The GSCI is a great proxy for the overall health of the commodities sector. Caveat: the index is heavily energy weighted especially around crude oil.

Metals & Energy:

Chart User Guide for the Metals & Energy section:

Directional Movement Indicator (DMI) set to 14 periods

Directional Movement Indicator (DMI) set to 14 periods

Daily Kagi chart using ATR, Change from Red to black determines trend + moving averages + DMI. Fibonacci's used as targets.

Weekly Heikin Ashi chart with Ichimoku, moving averages (50,100,200) to determine trend direction. Fibonacci's and Ichimoku used for longer term risk and trade management.

RSI used to determine over bought/ sold areas and possible longer term price reversals.

3 Line 4 hour break chart used for finding shorter term changes with and against the longer term trends.

Key Numbers Metals:

Key: S1 = next short technical level etc, L1 = next long technical level etc. built around the current price.R/R = Risk Reward either going long or short based on current price and stops / target at L1 and S1Longer term trend = determined from weekly charts

Copper (HG): Its not getting much better for the red metal! The fundamentals are there for a bullish run but the price keeps getting sold off. Next 3rd Wednesday of the month, significant on the LME may stir things up?2.7505 support? Currently trading at 2.9703 (approx. 6500’s LME)

Gold:Another metal struggling for direction on low demand. Back solidly in its favourite $1250 area. Downside support early $1200’s? Currently trading at $1249

Crude WTI Watch:

WTI Crude Oil:Crude starts to turn seasonally bullish, and with draws on inventories could demand and price be about to pick up? Currently pulling back from recent highs. To support at $55.

Rig counts stand at 929, +332 change from last year. +6 change on the week.

Key numbers:

Author: Stephen Hoad, The STOP HUNTER

Stephen Hoad has worked in the City of London for nearly twenty years. He has worked for some of the top Investment Banks and Trading Houses, in a career that has taken him from global risk management (front office, market, quantitative), to successful commodities options trader, to own account proprietary trader.

His professional experience in the world of trading and risk management is vast and he has extensive knowledge of financial markets, especially in the fields of Commodities, FX and Equities. He has a strong quantitative background and is a qualified Technical Analyst – he is on the elite panel of lectures teaching the STA Diploma in Technical Analysis. He also holds an MSc in Financial Markets & Derivatives and a BA (Hons) in Business & Economics. His career has taken him worldwide and he has lectured in London, the Far East and the USA.

He is a leading expert in technical analysis, systematic/automated trading, derivatives products, financial and quantitative theory, risk management and regulatory practices. He also has experience of dealing and trading with China.

He founded THE STOP HUNTER in February 2015, which provides quality education, training, mentoring and resources to private investors throughout Kent, London and the South East, who want to learn how to successfully trade the financial markets. He also trades from his offices in Canterbury, Kent. Stephen also undertakes consultancy work in the City and is also a part-time University lecturer.

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